SAB has completed promised R5.8bn plant upgrades

South African Breweries (SAB) has confirmed that its R5.8 billion investment commitment has been utilised to increase capacity at two of its plants, the Department of Trade, Industry and Competition (dtic) said on Thursday.

The company says that the investment was for civil works and new equipment to allow for increased local production for new product innovations, the dtic said in a statement.

SAB announced this investment at the South African Investment Conference 2023. Two of SAB’s plants were identified for these capacity upgrades: Prospecton Brewery in Durban, and Ibhayi Brewery in Gqeberha in the Eastern Cape. 

The South African Investment Conference was launched in 2018 by President Cyril Ramaphosa as a way to boost economic activity, setting a target to mobilise approximately R2 trillion in new investments over another five-year period, which begins next year.

"We are dedicated to sustainable investments and economic growth," SAB's CEO Richard Rivett-Carnac said in the statement.

"Our investments over time have contributed billions of rand to the [economy], which, alongside the investment commitments pledged at the 2023 South African Investment Conference 2023, have provided a significant boost to an economy sorely in need of stimulus.

"In terms of job creation, the investment into the Prospecton Brewery has created approximately 25 000 additional jobs throughout the value chain, whilst the Ibhayi Brewery investment has created a further 14 000 jobs throughout the beer value chain across South Africa," he said.

Rivett-Carnac added that the estimated 39 000 jobs created through these investments were across a variety of sectors, including agriculture, logistics, manufacturing, hospitality, construction and innovation, among others.

SAB employs around 5 700 employees and collaborates with nearly 3 739 suppliers, supporting around 250 000 jobs in the beer value chain. The company sources ingredients from local farmers, ensuring that 94% of their beer production is from SA.

The group has recently reported robust demand locally, notably for Carling Black Label, or Zamalek as it is affectionately known, seemingly taking market share from its rival Heineken.

The local unit of global brewing giant AB InBev said recently that it managed to grow beer volumes in high single digits in its third quarter to end-September. It also managed get revenue growth into the mid-teens after price increases. This was in the context of global beer volumes being mostly flat.